Cash Home Sales on the Rise in the U.S.

After nearly two-and-a-half years of annual declines, all-cash property purchases in the U.S. rebound

Cash home sales in the U.S. jumped in November to its highest level since March 2013, thanks in part to foreign buyers, who see the country’s real estate as a safe haven amid global turbulence.

According to a new report by RealtyTrac, the share of cash deals rose to 38.1% of all U.S. single-family houses and condo sales in November, up from 30.9% a year before. The year-over-year increase nationwide followed 29 consecutive months of annual declines in the share of all-cash residential property sales, according to the real estate information company.

“Global economic instability may also be driving more foreign cash buyers back to the relative safety of U.S. real estate,” Daren Blomquist, vice president at RealtyTrac, said in a written statement. Blomquist also pointed to new documentation and disclosure rules for mortgages that took effect in October, which make it even more difficult for buyers using the financing to compete with cash buyers.

In the luxury real estate sector, the share of cash transactions displayed even greater growth. In the price range of $1 million to $2 million, non-financed deals accounted for 47.65% of all sales, up from 36.02% in November 2014. For properties sold for $5 million and up, cash sales represented 50.97% of the total, an increase from 45.90%.

More than half of foreign home buyers in the U.S. choose to pay in cash, according to reports by the National Association of Realtors, and RealtyTrac’s data shows that the metro areas with the biggest annual gains in cash sales coincided with those preferred by foreign buyers.

San Francisco saw the highest annual increase (89%), followed by San Jose (74%). The metro area with the highest percentage of cash sales in November was also the number one market for foreign purchases in the U.S.: Miami, with 59.7%.

“We have strong Central and South American interest in creating a safe haven for their families,” said Mike Pappas, CEO and president of Keyes Company in South Florida, in a written statement. “The new mortgage rules do make it more difficult for these individuals to qualify for a conventional mortgage as their income source is not in the U.S.”

Industry experts also cited tighter inventory, continued activity of institutional investors, rising interest rates and an increase in immigrant purchasers whose culture prohibits them to buy with debt instruments as reasons for the uptick in all-cash property purchases.